FUTURE OF E-COMMERCE MAY HANG ON SHARED AUTHENTICATION
by Bill Densmore
American Reporter Correspondent
WILLIAMSTOWN, Mass. -- Since the Internet burst from its academic and military origins in the mid-1990s, people who own "content" have been troubled by two things: How to get paid, and how to keep from being ripped off. Fresh efforts,technology and legal theories may make 2002 the year for answers.
Let me illustrate with two anecdotes from childhood. When I was a boy, my mom used to let me paw through her handbag. I usedto be fascinating by the array of "charge plates" she kept for a dozen ormore stores. These aluminum strips, smaller than today's plastic creditcard, carried her name and address and the unique number that was herrevolving charge account -- a different number for each store. Each monthshe got 12 bills, or at least bills from each store she had patronized.
Today, my mother has two "credit cards" that serve the same purpose. Anyone who wonders whether the Internet needs a shared-authenticationinfrastructure for single sign-on and digital transactions need only referto the example of my mother's aluminum-plated handbag.
Momentum is building for the kind of shared-authentication digital-contenttransaction service that my firm, Clickshare, is now deploying in the newspaperindustry and among selected niche content providers. How manyauthentication and purchasing networks will ultimately exist? Who willcontrol them? Will they allow anonymous purchasing or will your name be asnecessary to a transaction as it is in the credit-card world?
The jockeying has begun. More on that a bit later.
The newspaper industry may yet get ahead of the curve on thisone. Already, several of the large publishers are working with Clickshare, including Belo Corp., MediaNews Inc., and units of The McClatchy Co., The New York Times Co. and the E.W. Scripps Co.
The uclick.com subsidiary of Andrews McMeel/Universal Press, the world's largest traditional syndicator, is now launching a service selling crosswords and comics on a syndicated basis through newspaper clients via Clickshare. And some of Clickshare's early pioneers are family-owned papers like the Lawrence[Kan.] Journal-World, Foster's Daily Democrat and the Concord Monitor, bothin New Hampshire.
Last October, Borrell & Associates, whose principals include a HarvardBusiness school expert on "disruptive technology" and fournewspaper-industry veterans, published a study calling for the newspaperindustry to consider a collaborative approach.
Citing the failure of advertising to support most Web publishing efforts, and the high cost of recruiting users, the report said strategic thinkers are considering a different approach. That approach is the distribution of users among many "home-base" Websites, with a common system for allowing those users to be recognized at and to purchase from independent, even competing, Websites. (See: http://www.clickshare.com/news/2001-10-23-borrell_report.shtml).
Now, with companies like Microsoft, IBM, Hewlett-Packard, MasterCard,American Express, United Airlines and BankAmerica focused on the notion ofsharing users through something called the Liberty Alliance, why isn't thenewspaper industry again organizing to play its card in a coordinated way?
An interesting take on the idea of collaboration among news sites is on the Website of the Newspaper Association of America. It's written by GordonBorrell, an industry veteran-turned-consultant and it suggests theindustry should be thinking about a universal "travel pass." (See: http://www.naa.org/TheDigitalEdge/DigArtPage.cfm?AID=3230)
The Liberty Alliance has the ingredients. It includes banks, retailers and telcos with millions of paying customers. It includes some entertainment companies have billions of dollars worth of "content" -- music, video entertainment, and games. And it includes technology companies, with the ability to develop the code and infrastructure.
But it doesn't have the right mix. Only one industry has both content and direct relationships with at least 60 million paying customers -- the newspaper industry. We've written a brief summary of how Clickshare enables this sort of approach, going right back to Clickshare's conception in 1994. You can find it at: http://www.clickshare.com/news/2001-10-23-history.shtml So after six years of trying to figure out a business model for Internet publishing, publishers show signs of readiness to try a new approach -- collaborative competition. Or maybe its just a return to the good old-fashioned idea of syndication. In either case, watch for the formation of a news industry collaborative to get behind the "travel pass" concept.
The single sign-on sweepstakes didn't really take center stage until about a year ago, when the Microsoft Corp. started making noises about its Microsoft Passport service. Bundled with the desktop operating system Windows XP, Passport would allow users to store personal information onMicrosoft servers, then use it to "fill out" forms on e-commerce Websites without having to type things over again.
Microsoft launched with its own Websites but adoption by third parties seemed elusive. Potential collaborators complained they didn't want their customer's personal information controlled by Microsoft.
Finally, Microsoft announced on Sept. 20, 2001, that it would attempt to "open up" its Passport identification service, toward what it called "federated authentication" and possibly work with the public-domain Kerberos systemfrom MIT.
A week later, Sun spearheaded an announcement of the Liberty Alliance, agroup of 32 companies who were said to be ready to collaborate on ashared-authentication infrastructure. In the months since, the LibertyAlliance has added AOL/Time Warner Inc., MasterCard International and American Express Corp. as founders, and plans a Jan. 22-24 summit meeting in Orlando, Fla. Now Novell Inc. has joined, as well.
As of Jan. 3, there was also talk of Microsoft and IBM getting together ona shared-authentication protocol: (See: http://uk.news.yahoo.com/020103/221/cn4nk.html) Still to be heard from: Visa.
At the heart of all of this effort is a desire to make it easy forconsumers to transaction with multiple Websites without having to passaround private information or create multiple accounts --- a so-called"single sign-on." While the Liberty Alliance is the highest-profile project in this arena, the seeds were sewn gradually. It started in 1994, when Clickshare's predecessor companies began worked on what we called our "one-ID, one-password" system for distributed user management.
Although the idea was pioneered by Clickshare, others since have caught onto it. The newspaper industry has been considering shared user management for years, and even tried to pull it together in 1997 with theNew Century Network. (See: http://www.businessweek.com/1998/12/b3570103.htm)
On Aug. 28, 2000, Cisco announced it had formed a content alliance to accelerate the development of the content-delivery services market. Partners identified included Digital Island, Genuity Inc., GlobalCenter Inc., NaviSite Inc., PSINet Inc., and Network Appliance Corp. The New York Times story on the announcement said the group would"create a specification for peering needs, such as authorizing the use of content between networks, and sharing logging or billing information to settle charges." Now Cisco is part of the Liberty Alliance.
The second anecdote from my childhood involves the Worcester, Mass., public library. I remember going there in the early 1960s and finding signs on the Xerox photocopier saying that it was illegal to copy books and periodicals on it. As a kid, I found that rather absurd.
What else was going to be copied in a library? Are we going through the same learning process online right now? Did the copy machine finish books as a viable business? On the contrary, the copy machine has probably contributed more to the sale and dissemination -- the marketing -- of intellectual property than any other single invention.
When will we stop viewing perfect digital copies as a danger and instead view them as the greatest marketing opportunity to hit music, text and multimedia entertainment? The key is to make it easy for consumers to do the right thing -- buy information at a reasonable price -- rather than trying to make it hard to do the wrong thing -- steal it. And how do you make it easy?
In the entertainment, software and book businesses, much of the hand-wringing over the last several years hasn't been so much about how toget paid, but how to make sure you don't get ripped off. Companies likeSealed Media, Reciprocal, ContentGuard, RightsMarket, InterTrust, PreviewSystems and Softlock Services have all tried to provide "locking" technologies which would somehow allow a consumer to get one-time or limited-time access to music, sofware or text objects, without being able to pass along the object. Now there's even talk that those efforts, at least with respect to "locked" CD-ROMs of music, may be illegal. (See: http://news.cnet.com/news/0-1005-200-8363449.html)
The evidence in the marketplace is that most of those efforts arefloundering because they are hard for consumers to use. If you don't have the first sale, there isn't any reason to worry about theft. At the same time, the music-swapping services, which operate outside or at least at the very edge of copyright law, are flourishing even after the meltdown of Napster because they give people what they want: easy access to music.
So where is the middle ground between Napster's ease of use -- but no sale -- and the digital-rights management approach producing no sale because use is so difficult? Once again, the latest effort is really defined by Microsoft, which is now pushing encryption of content, so-called "digital-rights management", as an integrated part of its operating system, Microsoft Reader and Microsoft Media Player products.
The danger here is that all content may ultimately have to flow through a single point -- Microsoft -- a solution likely to be unacceptable to major content owners. And Microsoft's efforts are attracting the attention of hackers, who are already at work on breaking the encryption mechanism.
One thoughtful approach comes from Stanford Law School professor Lawrence Lessig. He argues in his new book, "The Future of Ideas: The Fate of the Commons in a Connected World," (Random House) that it may be time to develop a theory of copyright law based upon "compensation without control" -- a system of almost open access to copyrighted materials where the owner must permit use for reasonable compensation -- prevails.
What's needed to make Lessig's idea work is agreement on a way to authenticate users as they access copyrighted material, and record their use. The marketplace can take care of the pricing function. That'sClickshare. We limit our gatekeeping role to nothing more than authentication and logging (recording clicks). Vendors own their content; retailers own their customers. All we create is the marketplacefor exchange to happen.
In the next few months, major companies will be making decisions about howto eliminate the modern metal charge plates -- multiple accounts and registration -- and how make it easy to buy instead of hard to steal. Many may work through the Liberty Alliance. Others may try a different approach. All of them could use Clickshare. The newspaper industry already does.
Bill Densmore is founder of the Clickshare Service Corp. He is based in Williamstown, Mass.